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McAuliffe Finds A Way To Sink Lower

- October 10, 2013

Yesterday, Federal Prosecutors Named McAuliffe As An Investor In A Business Venture That Defrauded Insurers By Using The Stolen Identities Of Terminally Ill People. “Virginia gubernatorial candidate Terry McAuliffe was one of dozens of investors with a Rhode Island estate planner charged with defrauding insurers by using the stolen identities of terminally ill people, according to court documents filed Wednesday by federal prosecutors in Providence.” (Fredrick Kunkle, “McAuliffe Among Investors In Rhode Island Insurance Scam That Preyed On Dying People,” The Washington Post, 10/10/13)

McAuliffe Invested In The Annuities Through Joseph Caramadre, Who “Pleaded Guilty To Stealing The Identities Of Terminally Ill Patients And Using That Information To Falsely Apply For Annuities And Bonds With Death Puts.” “McAuliffe and others became owners of the investment instruments through Cranston estate planner Joseph Caramadre. Caramadre pleaded guilty to stealing the identities of terminally ill patients and using that information to falsely apply for annuities and bonds with death puts.” (Jim Taricani, “I-Team: Caramadre Client List,” NBC10, 10/9/13)

Joseph Caramadre & Raymour Radhakrishman Pled Guilty To Stealing Identities Of Terminally Ill People To Reap $30 Million From Insurance Companies & Brokerage Houses.  “Two men accused of stealing the identities of terminally ill people to reap $30 million from insurance companies and brokerage houses pleaded guilty Monday, several days into their trial, and face prison sentences of up to 10 years each.  Estate planning lawyer and philanthropist Joseph Caramadre, 50, and his former employee Raymour Radhakrishnan, 28, each entered guilty pleas in U.S. District Court in Providence to single counts of wire fraud and conspiracy, ending the trial that began last week and had been expected to last up to three months.” (Erika Neidowski, “RI Men Plead Guilty To Cheating The Terminally Ill,” The Associated Press, 11/19/12)

CARAMADRE IS JUST THE LATEST IN A LONG HISTORY OF CONTROVERSIAL MCAULIFFE BUSINESS CONNECTIONS

McAuliffe Made Millions Through Insider Connections At Global Crossing, While Ordinary Investors And Workers Lost Big

In 1996, McAuliffe Was Introduced To Gary Winnick, A California Investor And Founder Of Global Crossing, By A Labor Union Official. “In 1996 McAuliffe earned impressive fees from Household Finance Corp. for persuading labor union leaders he had met in his political work to retain Household Finance to run the union’s credit card for members. That same year a labor official introduced McAuliffe to a California investor, Gary Winnick, who later let McAuliffe in on an investment in his telecommunications firm, soon to be called Global Crossing Ltd. By the time he sold his shares two years later, his $ 100,000 had become at least $10 million.” (John F. Harris And John Mintz, “Democrats Bet On Money Man As New Leader,” The Washington Post, 2/2/01)

Through His Connection To Winnick, McAuliffe Was Able To Buy Global Crossing Shares Before They Became Publicly Available. “Democratic Party Chairman Terry McAuliffe got an opportunity to buy Global Crossing shares before they became publicly available on the stock market and made a profit of $18 million.” (Editorial, “A Response To Global Crossing,” The Washington Post, 2/24/02)

Global Crossing “Kept Employees And Shareholders In The Dark While They Greedily Cashed In Hundreds Of Millions Of Dollars Of Stock.” “When the company started to report earnings losses and spiral downward last year, he and other Global Crossing executives kept employees and shareholders in the dark while they greedily cashed in hundreds of millions of dollars of stock. According to The NewsHour, corporate insiders sold their stock for a total of $1.5 billion. Fat paychecks for top management were the norm.” (Editorial, “Gary Winnick Should Go To Jail,” The New York Observer, 4/1/02)

  • “When Global Crossing Filed For Bankruptcy Protection That Year, Investors Lost $54 Billion And 10,000 Employees Lost Jobs.” (Bob Lewis, “Investment Questions Dog McAuliffe In Va. Gov Race,” The Associated Press, 5/28/09)

But McAuliffe Cashed Out Early, Turning His $100,000 Investment Into $8.1 Million. “Winnick invited McAuliffe to be an early investor in Global Crossing, and McAuliffe put $100,000 into the telecommunications venture. He sold some of his shares in 1999 — when the stock was over $60 per share — for $8.1 million.” (Ben Pershing, “Cuccinelli Ad Criticizing McAuliffe For Global Crossing Profits Sparks Controversy,” The Washington Post, 9/6/13)

McAuliffe Made Millions On A Union Land Deal In Which He Had Invested Only $100

In 1991, McAuliffe Partnered With A Union Pension Fund To Buy Real Estate In Florida.  “In 1991, Mr. McAuliffe, guided by Mr. Swann, bought some American Pioneer real estate -- once valued by the thrift at $50 million -- from the Resolution Trust Corporation for $39 million, records show.  Mr. McAuliffe's equal partner in the deal was a pension fund controlled by the International Brotherhood of Electrical Workers and the National Electrical Contractors Association.” (Jeff Gerth, “Friendship Counts; Clinton's Top Fund-Raiser Made Lots For Himself, Too,” The New York Times, 12/12/99)

McAuliffe Owned Half The Partnership, But He Put Up Just $100 While The Pension Fund Invested $39 Million. “Mr. McAuliffe's equal partner in the deal was a pension fund controlled by the International Brotherhood of Electrical Workers and the National Electrical Contractors Association. Mr. McAuliffe put up $100. The pension fund put up $39 million, but enjoyed a preferred position on any profits.” (Jeff Gerth, “Friendship Counts; Clinton's Top Fund-Raiser Made Lots For Himself, Too,” The New York Times, 12/12/99)

  • “Mr. McAuliffe Arranged The Financing Through Jack F. Moore, A Secretary Of The Union And A Trustee Of The Fund. Mr. Moore And Mr. McAuliffe Knew Each Other From The Gephardt Presidential Campaign In 1988, Mr. Moore Said.” (Jeff Gerth, “Friendship Counts; Clinton's Top Fund-Raiser Made Lots For Himself, Too,” The New York Times, 12/12/99)

McAuliffe Made $2.45 Million On The Deal. “McAuliffe, who owned half the partnership, put up just $ 100, the suit alleges. By 1993, the fund had paid McAuliffe $ 2.45 million to buy out most of his share, the suit said.” (Karen Gullo, “Labor Sues Pension Fund Over Deals With Clinton Fund-Raiser,” The Associated Press, 9/30/99)

The Department Of Labor Sued Moore, Claiming That The Deals With McAuliffe Were “Imprudent” And Caused The Fund To Lose Money. “The lawsuit names as defendants Jack Moore, former executive secretary of the International Brotherhood of Electrical Workers, and John Grau, executive vice president of the National Electrical Contractors Association. The two managed the unions' National Electrical Benefit Fund, at the time worth $ 6 billion.  The department alleges the pension fund lost money as a result of a loan and a partnership deal that involved more than $ 47 million in investments with McAuliffe's companies. Tax records show the fund did not receive all the principal and interest due under the loan.  ‘Both trustees, Moore and Grau, authorized each of the imprudent investments,’ the suit said. ‘If the fund had not made these investments, it would have had the money ... to invest in prudent investments that would have earned a greater return.’” (Karen Gullo, “Labor Sues Pension Fund Over Deals With Clinton Fund-Raiser,” The Associated Press, 9/30/99)

 

 


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